Benefits and Challenges of International Strategic Alliance for British Airways

BUSINESS STUDIES

Table of Contents
EXECUTIVE SUMMARY.........................................................................................................................3
INTRODUCTION.......................................................................................................................................3
LITERATURE REVIEW............................................................................................................................4
ANALYSIS AND DISCUSSION...............................................................................................................7
CONCLUSION.........................................................................................................................................10
REFERENCES..........................................................................................................................................12

EXECUTIVE SUMMARY
International business defines as a trade of goods and services, technology, capital,
knowledge etc. across national borders in global and transactional scale. This type of businesses
includes cross border transactions of offerings between two or more than two countries.
International strategic alliance refers to a collaborative arrangement between companies that
headquartered in several nations. In this partnering business is legally independent after the
development of alliance relationship. This report is based on British Airways that is a leading
aviation company in the in London, UK founded on 1974. By taken this firm this report, review
the use of international strategic alliances in foreign market expansion. Further it reflects
motivation behind formation of British Airways as an international strategic alliance. Therefore
this also assesses benefits and challenges of international strategic alliance for the partners who
involved within the international strategic alliance. This report helps in enhancing knowledge
regarding the alternative market entry methods so that more profitable results are attained on
time.
INTRODUCTION
Strategic alliance is also known as strategic partnership that represents an agreement
between two firms or more than two parties to follow the set of targets needed while remaining
independent organisation. It is a type of collaboration and cooperation that aims for synergy in
which every involving partner faith for the best and think alliance is highly efficient as compare
to individual efforts (Welch and Piekkari, 2017) . Strategic alliance includes the transfer of
technology by shared expenses and shared risk and it also develops an outsource relationship
where involving partners work for attaining long term objectives that is based on cooperatively
desired outcomes. To complete this business management report on international strategic
alliance British Airways is to be undertaken. It is a founding partner of one world airline alliance
along with Qantas and Canadian Airlines. In 1974 British Airways is to be founded that a net
income of £1,952 million. This company was privatized in February 1987 as a part of huge
privatization plan by conservative government. This report involves the literature review of use
of international strategic alliance in foreign market expansion along with motivation behind
British Airways as international strategic appliance. Further it explains benefits and challenges of

international strategic alliance to partners with the recommended several alternative market entry
strategies. After literature review analysis and discussion on explained frameworks are is used to
provide an interpretation of results.
LITERATURE REVIEW
Critical review to the use of international strategic alliances in foreign market expansion
According to the viewpoint of “Gomes, Carneiro and Dib, (2018)” international strategic
alliance defines as an accumulation of and different companies whose headquarters are belong to
different countries. Strategic alliance is a type of partnership in which companies dependence is
based on the formation of strategic alliance and their relationship with relative enduring business
enterprises. Therefore organisation who needs to widen their operation on global level to access
the new markets adopts the use of strategic alliance. International partnership is not only
beneficial for accessing global markets but also develops the competitiveness by leveraging
partner’s resources prominently. International strategic alliance support organizations to expand
their business in different countries to attain the goals and objectives. It is an essential concept
where mainly two or more than two companies are operate together in order to attain targets and
get high level of benefits. The cost of international strategic alliance is usually pooled among
businesses involved and represents the least expensive manner for all concerned form of
partnership. These types of strategic alliance are highly flexible in nature than an acquisition
with the degree of high level of controlled enjoyed by each and every party. In context of
international strategic alliance they generate the several global enterprises cooperative
arrangements. In present business environment there is a situation created where number of
businesses need to operate their business on global level using strategic alliance that formulates
an effective cooperation among companies that are independent. International strategic alliance
is a type of theoretical aspect that involves several transactions that minimize for short term
cooperation’s (Tung and Stahl, 2018). International strategic alliance is defined as a concerted
procedure between companies headquartered in various nations in the globe. In this strategic
alliance partners firms are officially seen as an independent after developing alliance and alliance
type relationship. The use of international strategic alliance is bifurcated into three dimensions.
In this first is collaboration in which licensing, franchising, supply, research and development,
marketing management service, manufacturing etc. secondly it is done with the number of